Global and China Wafer Foundry Industry Report, 2013-2014

The wafer foundry market experienced a wavy development, jumping by 39.4% in 2010 following a 7.9% decline in 2009. And the growth rate first shrank to 8.7% in 2011, then expanded to 21.7% in 2012, and fell back to 6.8% in 2013. It is projected that the growth rate will stand at 15.6% in 2014 and 6.0% in 2015. The fluctuation in the wafer foundry market will begin to present an increasingly small growth rate, which is mainly because of the differentiation in wafer foundry industry.
In terms of product type, foundry can be divided into two categories: Logic IC Foundry and specifically Foundry. The former is mainly comprised of high-shipment Logic IC, including CPU, GPU, Baseband, Application Processor, FPGA, APU, PLD, Networking Processor, and DTV MPU, etc. And the latter primarily consists of analog IC, mixed signals, Power IC, NVM, RF/HPA, CIS, MEMS, DDI (Display Driver). For the former, it is necessary to continuously improve manufacturing process and constantly narrow the line width, which could not only improve performance and reduce power consumption, but also reduce costs. These products update quickly, with the life cycle typically no more than three years, which requires a massive fund for developing next-generation technologies. As for the latter, however, its products have a long life cycle, with the life cycle for analog IC generally exceeding 5-10 years. And even a more than 20-year life cycle is not rare. These products can narrow line width but fail to reduce costs, and could increase costs instead. The specifically Foundry has a small market size and stable sales volume, but with low costs and high returns. In contrast, Logic IC Foundry has a large market size, but with a considerable fluctuation. Most important, only the leading player in the Logic IC Foundry industry can make profit, otherwise it is easy to make a loss. Take TSMC for example, which has taken the lead in the global market since its establishment in 1987, with its market share never less than 50%. Besides, TSMC is also the wafer foundry vendor that earns the highest profit around the globe, with the gross margin never lower than 40% even close to 50% in 2014 (exceeding Apple and Qualcomm). The No.2, No.3 and No. 4 players have ever suffered losses for many years, with SMIC, for example, making profit only in 2010 during the 12 years from 2000 to 2011. And the third player, Global Foundries, has suffered losses for years, with the revenue in 2013 showing a slight growth but the operating loss expanding from AED2.217 billion to AED3.217 billion. Details of the new report, table of contents and ordering information can be found on Electronics.ca Publications" web site. View the report: Global and China Wafer Foundry Industry Report, 2013-2014.